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Spain: Rajoy fails again in bid to form new government

Political leaders now have two months to reach a compromise before King Felipe VI calls for a third election.

02 Sep 2016 21:40 GMT

Acting Prime Minister Mariano Rajoy failed for the second time in one week to win a vote of confidence to form a new government [EPA]

Spain's acting Prime Minister Mariano Rajoy failed on Friday to win the confidence of parliament to serve a second term as prime minister, starting the countdown to a possible third election if a deal can't be brokered in the next two months.

Rajoy, leader of the conservative Popular Party (PP), lost the vote of confidence with 180 votes against and 170 in favour - the same result he obtained during the first vote on Wednesday.

He was backed only by members of his own group, by centrist upstarts Ciudadanos and a lone member from a regional party from the Canary Islands.

Political leaders now have two months from Wednesday's parliamentary vote to explore alternative alliances, but if their efforts come to nothing, vote-weary Spaniards will be asked to return to the polls in December.

The PP, in power since 2011, won the most seats in elections held in December and June but fell short of a majority both times as voters angry over corruption and austerity flocked to new parties.

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Spain has not had a coalition government since it returned to democracy following the death of longtime dictator Francisco Franco in 1975 and the country's four main parties have been unable to cobble together a governing alliance.

In his speech before the second vote, Rajoy made a final appeal to Socialist MPs to support his bid to form a government, and so avoid "running the risk of having to return to the polls".

"We all have the obligation to ensure that Spain does not foot the bill for parliamentary rifts and stubbornness," he added.

'Violated trust'

Socialist leader Pedro Sanchez hit back at his PP rival, arguing that allegations of illegal financing and graft that have dogged the conservative party under Rajoy's watch had undermined his credibility.

"Rajoy has violated Spaniards' trust," he said.

During the second parliamentary vote Rajoy needed only to get more votes in favour than against, meaning he only needed the Socialists, who finished second in both elections, to abstain.

But Sanchez fears he would lose his own credibility with his supporters if he were to abandon his longtime opposition to Rajoy, members of his entourage told Agence France-Presse.

The political impasse could take a toll on Spain's economic recovery and is increasing voters' frustration.

"Enough is enough. We are the laughing stock of the entire world," said Luis Garcia Montero, a 53-year-old bank worker, as he smoked a cigarette on a street bench in Madrid before going to work.

Although Rajoy remains in office as acting prime minister, he has no power to propose legislation or spend on new infrastructure projects such as roads and railways.

Spain's public works ministry and the state companies it oversees spent 20 percent less on contracts in the first six months of this year than they did in 2015.

Lack of budget

The lack of a fully functioning government will make it hard for Spain to submit a 2017 budget draft, outlining cuts to bring its budget deficit down to 3.1 percent next year by the October 15 deadline.

A caretaker government can only roll over its spending plan for 2016.

Outgoing Deputy Prime Minister Soraya Saenz de Santamaria warned ahead of Friday's vote that this could affect the payment of social benefits such as pensions and civil servant salaries to 14 million people.

Rajoy supporters hope the result of regional elections in the tiny Basque Country on September 25 could change the political calculus.

The Basque Nationalist Party (PNV), which has five seats, could support Rajoy nationally if it needs the backing of the PP to govern in the Basque Country following these polls.

The PNV has backed minority PP governments in the past but Rajoy has angered the party with policies it feels weaken its efforts to protect the Basque Country's distinctive language and culture. PNV leaders warned on Friday that they would not back the PP even after the Basque regional elections.